Significant Reduction in traffic over the last 3 weeks
During the week ending April 2nd, INRIX has reported a traffic reduction of 47% in the US. That follows reductions of 42% and 20% in the 2 previous weeks. There is no question that people are traveling less as governments implement policies to “flatten the curve” to minimize the impact on the healthcare system.
As a result, we have seen numerous articles in the last week about how the resulting reduction of the burning of fossil fuels has reduced smog and pollutants over China, Italy and more recently, Los Angeles as these geographies implement and obey stay-at-home orders.
How insurers are benefiting, and reacting
As for auto-insurance, the impact is starting to be seen as well. As mileage is the most accurate indicator of risk, people driving less (both in frequency and in duration) has resulted in the number of accidents dropping dramatically. Insurers have seen the number of claims drop and some have begun to refund customers. Allstate will refund approximately 15% of premium, at a cost of USD$600 million. These refund will be issued to US and Canadian customers over the coming weeks.
American Family will offer USD$50 refund per vehicle, which will total USD$200 million. Geico Insurance will provide 15% discount on renewal. Liberty Mutual will provides refunds totalling $250 million. USAA is the latest to announce credits, 20% on 2 months of premiums to be paid in the coming weeks.
Others are expected to follow suit in the US and Canada.
Possible government and societal benefit?
These additional savings are not meant to keep drivers home but do offer a perk as governments continue their education campaigns (and plans to keep their economies healthy).
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